Hospitals say no to new psych facility

Many fear Ascend
would cherry-pick
insured patients

Three of the Portland area’s largest hospital systems and the lobbying organization for Oregon hospitals have asked the state to reject an application for a new 77-bed psychiatric hospital in Beaverton, and the fight is all about money.
More specifically, it’s about who gets to treat the psychiatric patients who have insurance and who treats those who don’t.
Ascend Health, a private, for-profit corporation, filed an application with the state Department of Human Services certificate-of-need coordinator in November, saying it wanted to do something many hospital administrators considered impossible — run a profitable psychiatric hospital.
The battle over whether DHS should grant the necessary certificate of need will culminate Feb. 5, when the state agency issues a ruling on the application.
Psychiatric units in local hospitals all lose money, according to the hospitals.
So when New York-based Ascend told the state it wanted to turn the abandoned Cedar Hills Hospital in Beaverton into a facility that could help alleviate the critical shortage of hospital beds for people suffering mental illness, a number of mental health advocates applauded the move. Others wondered how Ascend could do it.
For years those involved in treating people suffering mental illness in Portland — from hospital administrators to patients — have decried the shrinking number of inpatient beds available.
In the Portland-Salem area, there are about 150 beds available for psychiatric patients; 10 years ago there were 500.
As a result, psychiatric patients, often brought to hospitals by police or through emergency department admissions, frequently have no place to go.
They can sit around local emergency departments for days and sometimes are sent to hospitals as far away as Grants Pass in search of an open bed. Some end up in jail.
Ascend says opening Cedar Hills would help solve some of those problems.
According to its application, Ascend plans to spend $6.3 million getting Cedar Hills ready to open, with more than $10 million budgeted for annual operating costs.
Within three years 150 full-time staff members would work at the facility.
But Providence Health and Services, Legacy Health System, Adventist Health and the Oregon Association of Hospitals and Health Systems think they have figured out how Ascend plans to make money — by siphoning off the psychiatric patients who have insurance, leaving the existing hospitals with an even greater percentage of uninsured or underinsured patients.
Not all patients pay
Kevin Earls, vice president of policy and advocacy for the Oregon Association of Hospitals and Health Systems, said that if general hospitals continue to have to treat large numbers of psychiatric patients with little reimbursement from state, federal and county authorities, more could follow the lead of Mercy Medical Center in Roseburg, which closed its 29-bed psychiatric unit in December.
“When a for-profit provider comes in, they lack that same charitable mission that other Oregon hospitals have,” Earls said. “They focus on the community-insured patients and a subset of relatively high-paying Medicare patients. In doing so they drain the few good paying patients.”
A spokesman for Ascend says the charge isn’t true at all and that the new hospital, if given permission to operate, will take its fair share of patients with little or no insurance.
Bob McGuirk, a Portland health care consultant who represents Ascend locally, said “it would be a tragedy” if the company’s certificate of need is denied.
Seventy-seven new psychiatric beds would increase the local capacity by half, and McGuirk said they could go a long way toward helping stabilize people who otherwise are traumatized.
Without the beds, McGuirk said, “patients will continue to have to be transferred to hospitals outside the Portland region, away from their families, or held in emergency rooms overnight or taken to a corrections facility.”
McGuirk said Ascend would make money at Cedar Hills not by refusing uninsured patients, but by following a formula used elsewhere for free-standing psychiatric hospitals — lower overhead, greater efficiency and volume.
General hospitals with psychiatric units incur expenses that a stand-alone psychiatric hospital won’t face, McGuirk said, including a large security force, emergency departments, diagnostic services such as blood and radiology labs for medical care, and large administrative staffs.
Emergency cases a concern
The emergency department, or the lack of one at the proposed Cedar Hills hospital, is a major reason why other hospitals object to the new facility, according to Dave Underriner, chief executive officer of Providence Health System-Portland.
Underriner was one of the signatories of a letter to DHS asking that Ascend’s certificate of need be denied.
The majority of psychiatric patients come to the hospital through the emergency department, Underriner said. And, he said, federal regulations governing emergency departments dictate that once patients have arrived they must get a bed.
“Ascend doesn’t have an emergency department. They have an inherent ability to say, ‘Yeah, we can take that patient, or no, we won’t take that patient.’ We don’t have that ability,” Underriner said.
But Ascend’s McGuirk said that his company has reached an agreement with Tuality Community Hospital in Hillsboro to take that facility’s emergency department patients, and that Ascend wants to reach similar agreements with the emergency departments at other local hospitals.
In fact, McGuirk said he called administrators at both Providence Portland Medical Center and Providence St. Vincent Medical Center hoping to discuss an agreement on taking patients from their emergency departments, but the administrators refused to meet.
Underriner, however, said that his hospital has another problem with the Cedar Hills hospital proposal: As a psychiatric hospital, it will not take patients who suffer from both psychiatric and physical illnesses.
What isn’t in doubt, McGuirk said, is the need for more psychiatric beds in the Portland area. Ascend projects that between Multnomah, Clackamas and Washington counties there is a shortage of 60 to 100 psychiatric beds. By 2020, according to Ascend’s projections, the shortage should reach 200 beds.
“My problem with the association’s position is that while they oppose the Ascend solution, a careful reading of their testimony shows they offer no solutions,” McGuirk said. “And they’ve had 20 years to do it.”
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